Pay to Play: Music Industry's Dirty Little Secret

It's party time at the Grammy's, but there is a cloud of scandal hanging over the music industry in the form of the most comprehensive investigation into corporate payola in the industry's history.

Paying to play records on radio -- payola -- seems as old as the recording industry itself, but this time it's not low-level promoters under investigation; it's the record companies and the conglomerates that own thousands of the nation's radio stations.

Outside legendary music producer Clive Davis' annual pre-Grammy party, a number of major figures in the music business said they aren't surprised it's still happening.

"I heard about that. That's been going on a really, really long time. I think back in the '70s they used to pay people with hookers and cocaine, and now they're just doing it with straight-up money. So they can all go out and buy their own hookers and cocaine," said Taylor Hawkins, the drummer for the band Foo Fighters.

"Honestly, payola has existed since the beginning of the music business, so it's not like its some brand-new thing that never happened before," said singer Alicia Keys.

Music industry figures were reacting to the news that a two-year-long payola investigation by the New York attorney general had now turned to the nation's nine largest radio conglomerates.

New York Attorney General Eliot Spitzer said evidence he has gathered clearly shows some of the radio conglomerates have participated in the illegal practice of accepting payments from record companies and middlemen for guaranteed airplay for certain songs.

"The behavior has been unethical, improper, illegal and a sanction of some severity clearly should be imposed," Spitzer told Ross.

Spitzer and music industry officials told "Primetime" that millions of dollars in payments, gifts and trips are exchanged each year to get music stations to add songs to their weekly playlists.

Spitzer said record company documents obtained in the investigation of Sony BMG and Warner, both of which have settled with the attorney general, revealed payments for songs that became major hits, including Jennifer Lopez's "I'm Real" and John Mayer's "Daughters."

Other artists whose songs are named in the documents Spitzer has obtained include Jessica Simpson, Celine Dion, Maroon 5, Good Charlotte, Franz Ferdinand, Switchfoot, Michelle Branch and R.E.M.

Last night Simpson's father and manager told ABC News, "All I know is we worked really hard to get the record on and it was as honest as I could be. So whatever happened above us, you know I have no answer for."

Spitzer said much of the money went directly to corporate bottom lines, unlike payola scandals of previous decades when individual disc jockeys and program directors received the money.

"We have people in suits coming in with documents rather than cash payments under the table to a DJ," Spitzer said.

The nine radio conglomerates that have received subpoenas from the attorney general are Clear Channel, Infinity (now CBS Radio), Entercom, Emmis, Citadel, Cumulus, Cox, Pamal and ABC.

The nine companies together control several thousand radio stations across the country. In statements to ABC News, five of the companies said they are cooperating with the attorney general's investigation and take the matter seriously. The other companies did not respond to requests for comment.